Trade Openness And Environmental Pollution

It is controversial for a long time whether trade will improve the quality of environment for a country especially developing countries.The impacts of trade liberalization on a country's environment exist in various paths. First, trade liberalization will promote economic growth, thereby affecting the size of one country's economy, industrial structure and technological progress and have multiple impacts on one country's environment. Second, trade liberalization will induce international transfer of pollution-intensive industries from developed countries to developing countries, and then have a negative impact on the environment of developing countries. Third, trade liberalization will lead countries to adjust environmental policies and then affect one country's environmental quality. In particular, developing countries' environmental standards and environmental technology are lagging behind developed countries, thus they are facing more pressures and challenges from environment during the process of trade liberalization. Based on the related literature, this paper selects seven indicators to mesaure China's trade openness, and introduces SO2, CO2 emissions on behalf of regional and cross-border pollutants respectively, to investigate the impact of trade libelization on China's environment.The full text is divided into six chapters. The first chapter reviews the relatedliterature about trade liberalization and environmental pollution--"PollutionHaven" hypothesis, "Race-to-the-Bottom" Hypothesis and "Inverted U Curve" Hypothesis. Chapter II briefly describes the status of China's foreign trade and environmental pollution. Based on previous two chapters, Chapter III introduces seven trade openness indicators and two pollution emissions indicators, based on the VAR model and cointegration analysis, and takes two types of Granger Causality Tests to investigate the intrinsic relationship between China's trade openness and environment. On this condition, chapter IV constructs a single-equation model, to study the relationship between China's economic growth and environmental pollution under the condition of trade liberalization, and test the "Environmental Kuznets Curve" Hypothesis in China. Finally, taking into account the impact of trade openness on economic growth, chapter V establishs a simultaneous equations model, to investigate the internal feedback mechanisms between China's trade liberalization, economic growth and environmental pollution. Chapter VI summarizes the results of empirical analysis of previous three chapters, and gives policy suggestions on how to coordinate the relationship between China's trade openness, economic growth and environment.